Government reveals plans for cap on care costs

Posted on 19/07/2013

Plans to cap care costs for the elderly
from 2016 were announced earlier this year, and the government has
now detailed how this will work as part of a consultation.

The £72,000 cap is designed to help
the elderly to cope better financially, but also to encourage people
to plan better for old age. The government's plans also ask insurers
to introduce more policies to help cover the costs of long-term care.
The cap itself is double the amount recommended by a report back in
2011.

The system will work as a deferred
payment scheme, whereby local authorities will pay care fees, and the
money claimed back after death from a person's estate. This is to
prevent people from having to sell their homes to pay for care fees
upfront.

However, with such a high cap, it is
only a relatively small percentage of elderly people who will benefit
financially, but those that do will be the ones with the highest care
needs over a longer period of time. This is because people do not
tend to live very long once they have reached the level of care
needed to take them over this cap. It is thought that around one in
eight pensioners will benefit.